Product replacement or discontinuation is obviously quite usual - but that doesn't alter warranty obligations. The manufacturer should have stocked sufficient to meet likely needs. Without knowing the value. It is hard to know whether it is worth pursuing them; right now it sounds like they are ignoring you in the hope you just give up.
Thanks for your viewpoint and I couldn't agree more with you on this.
However, they have actually discontinued the product and their revised e-catalogue confirms this. I am sure they understand that a Purchase Order from us would just add on to their revenue in multiples at best, to risk such ignorance. Of the 28 product categories they have supplied, the issue affects only 1 of the 28.
The query deals around with
(a) non availability of spare parts of the product and
(b) non availability of the product itself.
• Isle of Man Government
Experience suggests this will boil down to the terminology used within your warranty document. It may be unreasonable to expect a supplier to maintain full stocks for all warranty potential on discontinued products (Tim already mentioned value...). More commonly, suppliers offer repair or replacement with the direct alternative product. If the 'standard' warranty were considered unacceptable at the outset it would be appropriate to develop the warranty model to include a recommended spares holding based upon MTBF, or more onerously full replacement of the product range used including mobilisation costs. Either way both parties are fully aware of expectations and obligations from the outset.
Contractually speaking if the warranty document is deficient you are really only left with negotiation. An option being to approach the supplier for access to the original product production drawings and look to have bespoke replacements made.
As a compromise and considering the actual failure rate seems quite low (5# out of 1500#) - though in no way trying to belittle the frustration you must feel - are there visual aspects where use of the replacement product may be viable and use the original products from those locations for the more visible locations ?
1. Reply - Yes It happens when contractor's payment is to be made based on milestone basis and where delay from contractor's side concurrently delay from employer's side also during contract administration stage both parities contracts manager and PM don't sit to-gather to establish the delay attributed to which party, on other hand employer want the work to be completed with in laid completion dates. with found delay employ deploys third party manpower to complete work and adjust this cost from Contractor's Accounts under Employer's Claims.
2. Reply - can be replied based on type of contract is formed.
You can reach me offline over the email: firstname.lastname@example.org (Rajit Shah - Founder and Director, RPCPL)
Are the contracts customer contract? Perhaps it may be useful to present the contracts based on the unexpired residue of the term left and whether or not the consent of the customer is required (for assignment). Are the contracts being assigned to a third party? Will the customer have to consent to the assignment?
If you are terminating the contract, you may need to look at the requirements under the term of the contract that will allow you to terminate without liability.
I´d strongly encourage you to raise this question also within the IACCM technology network, which is a micro-community, where you will be able to get insights to new trends in this specific field and where I am sure you´ll have the opportunity to share ideas regarding the topic you have brought:
Also, please check our library: www.iaccm.com/resources/ where, you will find some articles about 'escrow agreements' for the software arena and other topics associated with risk management in the hardware world as well. By analogy you will explore ideas regarding hardware coming from best practices and escrow programs with the goal of risk mitigation
Hi Michelle - saw your post. For hardware: having a refresh plan with your supplier following a bit of a mutual benchmark, to see how best to provision for your upcoming capacity needs, might give some assurance. For services or subscriptions-based tech: having a documented 'cookbook' of key players and tech needed to recreate the service, including a list of any solutions 'not commercially available' or not easily re-purchased in Canada updated, might also be helpful to gage the difficulty of transitioning off your current tech,if needs be.
Those two governance-type processes, along with the typical supplier obligation to reasonably cooperate with any successor and to provide some mutually-agreed orderly termination assistance, might serve you well (outside escrow for software). Hope that offers some ideas...good luck. Cheers, Robin
Just in case you still need a few other pointers, consider the following:
One thing sales people understand is numbers so approach it from an accounting point of view. Since the contract is void, consider discussing the fact they will not be able to meet all the GAAP principles for revenue recognition and if your accounts folk are diligent they probably will back you up ( but run this by them - accounts - first. Companies interpret or apply GAAP revenue recognition differently ).
Since Company X no longer exists and as such has no contracting capacity, it cant assign/novate the contract which will impact collectability should the New Company choose not to follow through with what it has implied it would do re: payment
If you are required to create a new agreement using the same or similar terms and conditions, consider preparing a risk assessment analysis of the contract and let the stakeholders approve the risk they are taking on by utilizing the same Ts & Cs so everyone is on the same page. Whatever discussions or approvals were obtained for the former Company should not apply to the New Company.
the SLA should have the basic things like resolution time/ Response time, Escalation Matrix,support timimg periods,
• AVON Cosmetics Ltd
Did you manage to obtain a Contract Change Form and Process? I have one which we use for an IT Outsource Contract and could send through to you if you can provide your email address.
Aveva's ProCon solution contains a Post-Award module which supports the contract execution process from the contract award stage, through processes such as general correspondence, management of change, management of payment, and dispute resolution, to management of closeout. To your point, you need to protect yourself from contract variations and scope changes with the ability to manage these effectively and have a clear path to understand these and approve as necessary. ProCon can help with these vital challenges. Feel free to contact me for more information.
I cannot suggest any template, but can advise the following points to be taken care of while agreeing the Contract -
1) Overstay compensation or rate revision formula
2) Discount factor for scope increment or compensation factor for reduction.
3) % of Liquidated damages, in case of delay attributed to Contractor's end.
4) Try to negotiate with some grace period even after original contract completion date keeping the original rates valid.
There are a lot of aspects to consider here, for example:
are you buying a replacement service from another vendor? if so, do you need the current vendor to support transition to the new vendor?
does the current vendor need to return any confidential documents?
are all payments up to date?
are any contract penalties (service credits, LDs) outstanding?
Irrespective of the above, you need to formally terminate the contract, confirming that neither party has any liability to the other following termination, except, perhaps, confidentiality provisions and, potentially, any latent defect/warranty claims. Simply 'allowing' the vendor to walk away seems odd: you spent time (and therefore money) on-boarding them and agreeing a contract, it seems strange to end the relationship in this way.
• Neptune Marine Service Ltd
What contract states with regards to email communication and authorized representative. If the contract only states that communications shall be in writing to the authorized representative. The next question that will arise is Governing Law of the contract. As some countries have adopted the United Nations Commission on International Trade Law (UNCITL) published its Model Law on Electronic Commerce in 1996 which states that actions will not be invalidated or discriminated against merely because they were conducted electronically and emails are considered as a message in "Writing"
So, make sure the message in "Writing" based on the governing law is communicated to the Authorised Representative.
For the balance checks, I agree with Steve Grange and that shall suffice.
I agree with Steve Grange. Create a formal Exit plan with the company to close off any outstanding liabilities to both parties. Regardless of each others 'mutual consent' to this. At the end of the that process formally close it off with a document. This will prevent anything coming back to bite you in the future.
• Siemens Pte Ltd
I agree with Steve, Gaurav and Phil, They have covered multiple aspects which we have to look at before letting the vendor walk off as I believe in this case Vendor has no financial impact on them so easy for them to walk off without formal termination/closure of the contract. But from the moment you accept or let Vendor walk out all the responsibilities more of liabilities fall on your company.
• Resolute Corporate Services Pty Ltd As Agent for Société Des Mines de Syama S.A (SOMISY S.A)
I think you should prepare an official document signed by both parties to legally and lawfully end this contract by a mutual agreement by both parties.
• Resolute Corporate Services Pty Ltd As Agent for Société Des Mines de Syama S.A (SOMISY S.A)
I think you should prepare an official document signed by both parties to legally and lawfully end this contract by a mutual agreement by both parties. your message
The first item to consider is to ensure to review the Services Agreement and review the Termination and Notices Section and any others that may come in to play when terminating an agreement. Are there a certain number of days after written notification that the services agreement will terminate? Are you terminating a master agreement and any ordering documents or SOWs or either or both? Do you need to provide notice to the contractor via email, mail, certified mail, overnight delivery? Does your agreement allow for electronic transmission communication as an acceptable method of communicating to make it legally binding in a notices provision?
I then also check to see if there are provisions such as Confidential Information/Materials or any other security items that need to be returned to your company that would need to be mentioned in a termination agreement or letter. Is there any confidential information, materials, laptop/pc, security badges and property that need to be returned and when, how and to whom? These are a few of a number of items may need to be addressed in a termination agreement along with ramp down services and whether there are any fees apart from standard fees that would need to be paid to considered. I have seen termination agreements be very simple with little to no instruction since the Services Agreement was simple straightforward agreement with little to be exchanged by way of CI, materials, goods, security, property and others that can run a few pages of negotiated ramp down services, transfer of services to another contractor or training and payment of ramp down costs at stake.
You must be very careful here, as the merger/acquisition does not always lead to a completed transaction. If the merger/acquisition does not complete, the co-mingling and sharing of documents could result in risks such as violation to confidentiality as well as regulatory violations. It is often beneficial to consider a "clean room" approach where the contracts and other documents are brought into a third-party environment, or clean room, for review, analysis, comparison and contrast. If the merger/acquisition is abandoned, the documents are returned to the original owner without the other party having seen the documents. The third party clean room operator is precluded from sharing information between the parties. this technique allows due diligence to proceed insulated from many of the risks.